BioCryst Pharmaceuticals, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparisons are to FY2020 unless noted. BioCryst is a commercial-stage biotechnology company focused on oral medicines for rare diseases. Financial amounts below are in U.S. dollars; figures are rounded to millions where appropriate.
Business context
ORLADEYO (berotralstat), an oral preventive treatment for hereditary angioedema (HAE), was the company’s principal commercial growth driver and had its first full year of U.S. sales. During 2021 it also received approvals in the EU, Japan, the U.K. and UAE. RAPIVAB (peramivir) is marketed for influenza, including U.S. government stockpiling sales. BCX9930, an oral Factor D inhibitor, advanced into pivotal PNH studies; BCX9250 for FOP remained in Phase 1, and galidesivir remained government-funded development-stage work.
Key financial metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Total revenue | $157.2 million | $17.8 million |
| Net product sales | $136.4 million | $3.3 million |
| Operating expenses | $334.9 million | $192.6 million |
| Loss from operations | $(177.7) million | $(174.8) million |
| Net loss | $(184.1) million | $(182.8) million |
| Net loss per share, basic and diluted | $(1.03) | $(1.09) |
| Net cash used in operating activities | $(142.2) million | $(135.1) million |
| Cash and cash equivalents at year-end | $504.4 million | $272.1 million |
| Net working capital at year-end | $462.4 million | $218.1 million |
FY2021 revenue included $121.9 million of ORLADEYO sales, $7.2 million of RAPIVAB sales, $7.3 million of peramivir sales to partners, a $15.0 million Torii milestone, and $5.9 million of collaborative and R&D revenue. Interest expense rose to $59.3 million from $14.5 million. A $55.8 million gain from extinguishment of the non-recourse PhaRMA Notes materially offset expenses; absent that gain, reported net loss would have been higher. The $2.3 million tax expense was primarily state tax.
Year-end current assets were $566.1 million and current liabilities were $103.7 million. The balance sheet included $449.4 million of royalty financing obligations and a $136.1 million carrying value for the secured term loan; disclosed principal including PIK interest was $142.1 million. These financing balances are not directly comparable to cash, and royalty monetizations transfer a portion of future product economics.
Material changes versus FY2020
- Revenue increased $139.4 million, primarily reflecting $122.5 million higher ORLADEYO net revenue following launch, plus increased RAPIVAB and partner peramivir sales and the $15.0 million Japan milestone.
- R&D expense rose to $208.8 million from $123.0 million, mainly due to Factor D program investment; BCX9930 program spending was $132.3 million versus $35.3 million.
- SG&A expense increased to $118.8 million from $67.9 million as BioCryst expanded commercial operations and international activity. FY2021 included $8.9 million of accelerated stock-compensation charges and $1.1 million of severance costs.
- Operating cash use increased to $142.2 million from $135.1 million. Financing activities provided $359.7 million, including $300.0 million from royalty sales and $50.0 million from a share sale to RPI.
- Stock-based compensation increased to $34.6 million from $14.8 million. Shares outstanding at year-end were 184.4 million versus 176.9 million.
Outlook, commentary and risks
Management forecast FY2022 ORLADEYO net revenue of at least $250 million and operating expenses, excluding non-cash stock compensation, of $440–$480 million. It expected spending growth to be driven predominantly by investment in the Factor D program. Management stated that available resources, including an additional $75 million potentially drawable under the credit agreement, were expected to fund operations for at least 12 months; it also expected FY2022 expenses to exceed revenues and anticipated continued operating losses and negative cash flows.
Management estimated ORLADEYO could reach more than $1 billion in global peak annual sales, with 70–80% expected from the U.S.; this is an estimate subject to substantial commercial, reimbursement and competitive uncertainty. The filing reported U.S. coverage by all major payors and pharmacy benefit managers as of January 10, 2022.
- Royalty financing: In November 2021, BioCryst received $150 million each from RPI and OMERS for rights to specified future royalties; RPI also receives royalties on BCX9930 and another Factor D inhibitor. These obligations can reduce future product economics. The obligations’ carrying value and interest expense depend on uncertain sales forecasts.
- Debt and covenants: The Athyrium credit agreement matures in December 2025, bears variable-rate interest, is secured by substantially all assets subject to exceptions, and includes liquidity and other restrictive covenants. The company reported compliance at year-end. Additional borrowing is subject to conditions and may carry make-whole fees.
- Pipeline and execution: BCX9930’s pivotal studies and potential safety, efficacy, enrollment, manufacturing and regulatory outcomes remain uncertain. The company relies on third parties for manufacturing, clinical work and U.S. distribution; U.S. ORLADEYO sales depend on a single specialty pharmacy.
- Other risks: The filing highlights ongoing losses and possible need for further capital, competition, pricing and reimbursement pressures, intellectual-property protection, government-contract dependence, and possible COVID-19-related operational or development disruption. Management said COVID-19 had not materially affected financial condition, results or liquidity to date.
- Unusual item: BioCryst wrote off the $30.0 million PhaRMA principal and $25.8 million accrued interest at year-end 2021, recording a $55.8 million extinguishment gain. The notes remained in default; the company cited their non-recourse nature and expired Japanese patent protection, while disclosing potential collateral remedies and loss of future Shionogi royalties.
Important facts for investors to verify
- Whether ORLADEYO revenue growth, patient retention, payer access and international launches support the FY2022 minimum revenue forecast and longer-term peak-sales estimate.
- BCX9930 trial progress, safety and efficacy results, and the timing and cost of development across PNH and renal indications.
- Cash burn against available liquidity, and whether the conditional $75 million of credit capacity can be drawn on acceptable terms while meeting covenants.
- The detailed royalty rates, thresholds, payment caps and timing under the RPI and OMERS agreements, and their effect on future net cash flows.
- The accounting and cash-flow implications of royalty financing interest, the PhaRMA debt extinguishment and continuing default-related risks.
- Dependence on the U.S. specialty pharmacy and government contracts, including the expected 2022 RAPIVAB shipment and continued galidesivir funding.